Six things to know to resolve insurance cases during COVID-19
While some insurers have used the pandemic as an opportunity to settle cases, others have used this time to delay paying claims.
As a defense attorney, I firmly believe we are all in the resolution business. The pandemic has forced us to alter how we look at resolving cases. Instead of the usual steady tidal action of cases going to court and eventually settling during pre-trial conferences or on the eve of trial, cases get stalled at the proverbial courthouse steps.
The courts have been closed or operating at a significantly reduced capacity over the past 13 months. A reduction in judges, court personnel and jury trial limitations because of COVID-19 protocols has considerably slowed personal injury settlements in court. Even now that the courts are open for trials, there are so few trials that they are the exception and not the norm.
There are mixed results for settling cases during the pandemic. Anecdotal evidence suggests that insurance companies are not upset or uncomfortable with the scenario of fewer cases settling as it allows them to continue to delay paying claims and using the money for reserve purposes. Because the filing of new cases in New York was approximately 25% less than the year before, increasing caseloads for insurance adjusters are not driving settlements as pending cases are relatively stable. Also, there is a commonly held misconception that defense attorneys do not want to settle cases. After all, every settled case represents a lost chance to bill and reduces the number of pending cases a firm has.
There has been some truth to that notion over the years, and plaintiff attorneys have long accused defense attorneys of not relating their interest in resolving cases. While several of the insurance companies that we represent have used the pandemic as an opportunity to settle cases, plaintiff attorneys have said that insurance companies are trying to make lowball offers and settle cases for less than their full value in order to take advantage of hard economic times and plaintiff’s need for money.
At my firm, for example, faced with stalled courts and a reduction in judges and court personnel, we have taken the leadership initiative. This past year, we resolved over 1,300 cases. It is an increase of 38%, with almost 500 resolved through mediation and arbitration. This year, we will continue our efforts and continue to focus on an early resolution for our clients. With the slowdown, rather than sitting back and waiting for things to reopen, we’ve taken the bull by the horns and scheduled countless nonstop mediation days with various carriers and clients, and we have had tremendous success.
For one insurance carrier, I selected a portfolio of cases that were ripe for resolution, scheduled mediation days, and went to work. We chose 25 slip-and-fall and ceiling collapse cases from one habitation program, which involved back, neck and knee injuries. I settled 24 of 25 cases at the mediation days, and the 25th case settled sometime after when the codefendant finally came up with enough money for his share. Settlements were all within the authority given to us by the carrier.
I will share with you my list of six things you must know for resolving cases during the pandemic, which highlights points to help close cases that have been on dockets for too long.
1. Insurers crave settlements
Experience teaches there’s a long way between the initial demand by a plaintiff and the ultimate resolution. Like a ritual dance, there is a process to a successful mediation. Insurers are always looking for low-hanging fruit, that is, cases that can be resolved before defense costs mount.
2. Cavalry coming? Not a chance
With reductions in judges, court personnel and long delays, a judge will not be able to devote much time to attempt to settle your cases. If a judge ever had time in the past trying to resolve cases, those days are long gone given the court’s current state.
3. DIY: Do it yourself
If you want a case settled, you must DIY, do it yourself, and push to get it done because no one will try to get it settled other than you. The emphasis is on individual attorneys, for both plaintiff and defendant, to move their cases. It is incumbent on everyone to resolve cases now that the courts will be operating with reductions and backlogs.
4. Too early to settle? Never
Insurance companies live and die by dispositions, so they are often eager to resolve the case as soon as it makes sense. A realistic demand makes insurance companies want to move a case early. They know this will save expenses and defense costs. Therefore, it is often the most opportune time to settle a case early in its lifespan.
5. Too late to settle? Never
You may have a case sitting and gathering dust for a while, and these are precisely the kinds of cases that insurance companies try to settle the hardest. The statistics worsen as a case sits on a pending docket. Injuries can lead to more surgeries, and defense costs can escalate. The adjuster and the company want to get these cases closed. No one wants to hear, “this is the oldest case on my docket.”
There is always an opportunity to reach out to defense counsel or the adjuster for unresolved cases and attempt to move the case. Although both plaintiffs and defense attorneys sometimes dawdle in settling cases, old cases are not like fine wine — they do not get better with age. Nor should a plaintiff or defense attorney desire a jury of six ordinary citizens to render the ultimate decision, fully knowing how unpredictable juries can be.
6. Case closed
Clients and insurance companies love closed cases. If you want to gain the thanks of your clients and insurance companies, settle cases. They will appreciate the effort. If you settle one case, two more will come your way, and if you want to make a friend in this business, settle your cases. Your clients will thank you for it.
Conclusion
Having settled thousands of cases throughout my career, I believe more than ever we are all in the resolution business, and our most important job is to resolve cases. Since the courts cannot decide cases like before, we must work together, settle cases and reduce court backlogs. The “new normal” must be that we all embrace settling cases. The phrase “case closed” is music to everyone’s ears.
Jeffrey T. Miller is a managing partner at Pillinger Miller Tarallo in New York and oversees the firm’s litigation department. He can be reached at jmiller@pmtlawfirm.com.
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